Happy Deficit Day! A new national holiday has been created in the honor of Barak Obama. “Deficit Day”; it has a certain ring to it. As of Deficit Day, Sept. 25 this year, every dollar the Federal government spends until December 31 will be borrowed; ten Billion dollars or more, per day, every day until New Year’s Eve. This year Deficit Day fell 2 days later than last year thanks to sequestration; but we can’t always look to responsible government to delay such a special day.
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Deficit Day is especially important in 2013 as on this day the Census Bureau announced that the last quarter, April through June of 2013, was marked by the highest tax revenue ever collected in a second quarter since it started tracking State and local taxes. That’s right, we are now the highest taxed generation AND our government entities are spending those tax dollars faster than we can generate them. Oh, Barak Obama owns the prestigious honor of creating more debt than every president from George Washington to George Bush, combined. And under Jerry Brown, California’s debt just this year has grown from $132 billion when the year started to $137 billion today.
But the problem is bigger than the two master spenders.
The Census Bureau reports that “revenue from state and local taxes , general sales and gross receipt taxes, motor fuel taxes, motor vehicle taxes and taxes on alcoholic beverages each hit new all-time highs in the second quarter of this year”. That’s right, there is nothing you can now do without it or you being taxed.
Americans paid a record $114.032 billion in state and local income taxes in the second quarter, up 7.3% from the second highest quarter (2008). Americans also paid a record:
$82.2 billion in state and local sales and gross receipts taxes;
$11.254 billion is State and local motor fuel taxes;
$7.945 billion in state and local motor vehicle taxes;
$1.827 billion in state and local alcoholic beverage taxes,;
Overall state and local tax revenues hit a second quarter record of $382,238 billion in 2013, with overall state tax revenues during the quarter exceeding those of any previous quarter.
However, the second quarter of 2013 fell behind the fourth quarter of 2012 as the highest ever state and local tax revenue quarter as tax revenues jumped due to millions of people selling stocks and other investment s to avoid higher income taxes under the Obama administration tax increases effective in 2013. Projections the fourth quarter of this year, based on tax collections so far, show that the fourth quarter of this year will jump to the top of the charts, making the fourth quarter of 2011, 2012, and 2013 record years. Any we were lucky enough to live through them!
Riding the Government Gravy Train
Detroit, Michigan, eighteen billion in debt and bankrupt, is the perfect example for this reckless world of government taxation and spending. For a decade, the city had been spending $100 million more per year than it got in revenue. An independent auditor recently brought in by the emergency manager running the city during its bankruptcy has discovered that during this period the city’s pension plans were giving out millions of dollars in “bonuses”. These undisclosed bonuses were given annually to retirees and active workers. Known by retirees and workers as their “13th paycheck” these bonuses were paid, but not disclosed by the city, despite the knowledge the city was bankrupt. An insane “gift” from an irresponsible governmental giver accepted by irresponsible recipients who are now demanding that their payments be continued despite the city and all its “plans”, pension and otherwise, being $18 billion in debt.
Or you could look to California for your examples. Put a map of California on a wall, close your eyes, and throw a dart at the map. Anywhere it lands is a city, county or State government entity with massive debt, what Guv. Brown calls the State portion only a “Wall of Debt” .
Or look closer to home; just look, for example, at fire services in Contra Costa County. ConFire, which covers much of the county will be bankrupt in 2016, says County Administrator David Twa. Today , according to Daniel Borenstein, CC Times reporter, more than one quarter of the district’s budget goes toward pensions. Pension costs are rising and by the 2014-15 budget year, will cost the county $1.19 for every $1 in payroll costs, with firefighters adding another $.27. With payroll costs skyrocketing the County has hired Fitch and Associates to find a solution. Or more correctly two solutions, as Fitch has two studies in progress , one on fire suppression and one on EMS services; neither address pension costs, but play around the edges by tweaking service models and adding a tax. In other words, no one is serious about resolving the funding crises other than taxing us again.
In east county, The East Contra Costa Fire Protection District has just (QUIETLY) announced that the district’s pension costs will rise 40.47% in fiscal year 2014-15, “impacting the budget by $1,284,426” (the entire 2013-14 budget is $11,947,734). The district is currently operating with a $7+ million two-year Federal “Safer” grant to fund firefighter positions after a parcel tax failed in 2012. The grant ends in November 2014 and the District has not undertaken any studies to restructure its service, merge with other fire departments (ConFire, CalFire, etc.), renegotiate its labor agreements or re-structure its work rules. It is, however, studying what a new parcel tax ballot measure should look like.
If you can’t figure out why the economy has not recovered, why jobs are not growing, why 77% of all jobs created in the country in the past year are part-time, why the average family income is down by $4,000+, and the average standard of living is decreasing, rather than increasing, go to the top of the page and re-read. Carefully this time.
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